There are many more exemptions from the TSR than those found in the text of the regulation itself. The new “ban”, then, may not apply to your calls and you should consult with your attorney before giving up the medium.
With the recent amendments to the Federal Trade Commission’s Telemarketing Sales Rule (TSR) now in effect1 , it is ever more pertinent to determine whether these new restrictions apply to the type of telemarketing calls you place to consumers. Even if your prerecorded calls appear banned by the new rule, you may be exempt from the restriction (though still subject to other federal and states rules).
There are three types of exemptions from the new restrictions: express exemptions found in the TSR itself, implied exemptions based on certain definitions found in the TSR or created by agency opinion, and limitations on the FTC’s jurisdiction established by Congress in the FTC Act.
First, the TSR contains several express exemptions: (1) calls for the sale of pay-per-call services, (2) calls for the sale of franchises, and (3) calls in which the sale of goods or services or charitable solicitation is not completed until after a face-to-face presentation, (4) calls initiated by a customer or donor, (5) calls initiated by a customer or donor in response to an advertisement by any means other than direct mail, (6) calls initiated by a customer or donor in response to direct mail if certain disclosures are satisfied, (7) calls between a telemarketer and any business, and (8) calls that deliver prerecorded healthcare messages made by, or on behalf of, a covered entity or its business associate, as those terms are defined in HIPAA.2
Next, there are three implied exemptions because certain calls are not “telemarketing” as that term is defined in the TSR. This term is described as a “a call to induce the sale of goods or services or a charitable contribution by use of one or more telephones and which involves more than one interstate telephone call. . . .”3
The first exemption resulting from the definition of “telemarketing” is for calls which are purely informational, and contain no solicitation for the sale of goods or services or charitable solicitation, (i.e. calls conducting a true market research survey).
The second of these exemptions is political calls. Political calls may include calls to conduct a poll or solicit votes, or calls to raise funds for a political cause. Both types of calls are not included in the definition of “telemarketing”.
The third exemption derived from the definition of “telemarketing” is for intrastate calls (i.e. calls made within one state). The FTC has reasserted this exemption in its Commentary to the TSR, noting that it “only has authority to regulate ‘a plan, program or campaign which is conducted . . . by more than one interstate telephone call. [emphasis added].’”4 A campaign with mixed intra- and inter- state calls would subject the intrastate calls to the FTC’s definition even though a campaign involving only intrastate calls would be exempt.
Third, the FTC lacks jurisdiction over certain kind of entities creating additional exemptions. The FTC Act excludes banks, savings and loan institutions, federal credit unions, and common carriers (i.e. telephone or air carriers) from its jurisdiction.5
The FTC Act also implies by definition that non-profit organizations are outside its jurisdiction because the term “corporation” only includes “any company … which is organized to carry on business for its own profit or that of its members.”6 Note that the FTC has ruled that calls by a third party, on behalf of a non-profit organization, such as a professional fund-raiser, are subject to the FTC Act and TSR because these organizations carry on business for their own profit.
Insurance companies represent yet another exemption from the TSR based on the McCarran-Ferguson Act.7
In conclusion, there are many more exemptions from the TSR than those found in the text of the regulation itself. The new “ban”, then, may not apply to your calls and you should consult with your attorney before giving up the medium. You must also keep in mind that other federal law and sometimes more restrictive state telemarketing regulations can still apply to practices exempt from the TSR.
1 These amendments include a ban on prerecorded messages made without the prior express consent of the recipient and call abandonment requirements and became effective September 1, 2009. See 16 C.F.R. § 310.4
2 These exemptions may only apply to certain sections of the TSR and also may be limited in application by certain requirements, see 16 C.F.R. § 310.6 for a complete listing of the exemptions.
3 16 C.F.R. § 310.2(cc).
4 68 Fed. Reg. at 4589 (2003).
5 15 U.S.C. §45(a)(2).
6 15 U.S.C. § 44. Cases have held, however, that nonprofits can be within the FTC’s jurisdiction if they engage in profit making activity for themselves or their members.
7 15 U.S.C. § 1105 et seq.; see also, “Complying with the Telemarketing Sales Rule”, available at: http://www.ftc.gov/bcp/edu/pubs/business/marketing/bus27.shtm, p. 9 (last visited October 15, 2009).